Longtime CPG giants have been hobbled by the rise of alternative retail channels from Amazon to Whole Foods (now one in the same), and European grocers like Aldi, just as scrappy niche brands, direct-to-consumer e-tailers, and higher-end private-label lines appeal to changing consumer tastes, while chewing away at their market share.

To varying degrees, the consumer brands that line merchants’ shelves have been sucker punched by disruption.

The strategies that consumer products firms have relied on for sales growth since the 1950s — cozy relationships with mass merchants that prized big national brands — “have been turned completely on its head,” said Colby Sheridan, global industry solution owner with SAP, who along with Wolfe and myself, were guests on the podcast.

Consumers now have an embarrassment of product riches at their smartphone-tethered fingertips.

And with more than 50% of purchases influenced by a digital touch point, brands are now “fighting for share of stomach” like never before, Sheridan said.

The Embattled Store Shelf

The shift has forced brands to rethink everything from pricing to their retail partners and product mix.

Iconic brands like Campbell have long fed sales and profit margins via prime shelf space at retailers from Kroger to Walmart and CVS. But that safety net is now fraying.

“They [had] the most expensive real estate in the world down to a science,” Sheridan said. But the market has changed.

When it comes to where to shop and what to buy, consumers are faced with a “world of infinite choice,” Sheridan said. “[How do brands] get share of mind with the consumer when Amazon makes it [so] easy for them? Companies are struggling to figure out the messaging there.”

The Little Engines That Could

Meanwhile, “smaller, more nimble, upstarts have captured the hearts and minds of consumers,” said Sheridan.

Dollar Shave Club is a textbook example of an online startup that singlehandedly changed how men have purchased razors for decades with its affordable online subscription model, destabilizing category dominators like Gillette.

Now small brands that would have barely been on the radars of market-share leaders are considered a threat, as the playing field levels out between large and small brands, Wolfe said.

A number of the big brands have been buying up the cool, disruptive little guys to fight back: Unilever bought Dollar Shave, for example, General Mills snatched up Annie’s Homegrown Foods, and theoretically scooped up the indie brands’ consumer devotees in the process.

But the innovation-via-acquisition strategy isn’t necessarily a sure-fire solution. These small businesses survive, in part, by managing risk, Wolfe said. Once a CPG giant acquires them, the micro brands can get “lost in a big company, and it’s hard to innovate.”

Today, products, alone are no longer enough, Wolfe said. Shoppers "want more consumer outcomes, not just consumer products; we’ll see some Darwinism at work,” Sheridan said.

Trained in part by Amazon’s product reviews and recommendations, shoppers today expect customized and contextually relevant offers whether they’re home, in store or on the go. And “What you need in the moment is different than what I need in the moment,” he said.

Brands are exploring new ways to engage with them, and influence choice by rethinking the path to purchase. Reaching today’s shopper, the theory holds, calls for catering to what Harvard Business Review calls the many “micro-moments” throughout their day.

That’s been Hershey’s focus under the leadership of Doug Straton, which it plucked last year from Unilever, with brands like Dove soap and Ben & Jerry’s ice cream, to be its chief digital commerce officer.

E-commerce and healthy eating trends are taking a bite out of candy sales. Hershey’s is banking on the premise that because digital touch points are now the first stop on consumers’ purchasing journey, online content is just as important as in-store merchandising, and when that's lacking, “it’s like sending someone to an empty store shelf,” he said.

By definition, good digital content, like a product description page on Amazon, is customized to meet shoppers' on-demand needs and preferences in a bricks-and-clicks shopping landscape, Straton said.

That could mean texting a Reese's Pieces discount to a consumer in the supermarket aisle that complements their digital shopping list, or sending them a targeted email for a cookie recipe based on their online search history.

Brand marketing, retail product availability and a hot price are no longer enough to drive trial and repeat purchases, Sheridan said. Consumers crave solutions to healthy lifestyle objectives, “and an answer to the question, ‘what should I have to eat?’" he said. “This is context. It’s all very personalized.”

I've been a business journalist specializing in the retail industry for over a decade, covering consumer news, company profiles and industry analysis pieces, as well as the intersection of business news and shopping, fashion and social trends.